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“Section 36(1)(viia)”

Section References (mined)Section 36Section 36(1)(viia)445 judgments

The decision most relied on for Section 36(1)(viia) is Maxopp Investment Ltd. v. CIT (347 ITR 272), cited in 516 judgments on BharatTax.

Leading authorities on Section 36(1)(viia)

Maxopp Investment Ltd. v. CIT
347 ITR 272 · 2012 · High Court
516
citing judgments

Disallowance under Section 14A cannot exceed the exempt income earned. The Assessing Officer must record satisfaction regarding the assessee's accounts before making any disallowance.

South Indian Bank Ltd. v. CIT
438 ITR 1 · 2021 · Supreme Court
508
citing judgments

The mixed fund theory is affirmed, holding that no disallowance of interest expenditure under Section 14A can be made if the assessee possesses sufficient non-interest bearing funds, such as capital and reserves, to cover investments made in tax-free securities.

Vijaya Bank v. CIT
323 ITR 166 · 2010 · Supreme Court
392
citing judgments

A provision for bad and doubtful debts debited to the profit and loss account and reduced from advances on the balance sheet constitutes a write-off for deduction purposes. This is true even if individual debtor accounts are not closed.

Southern Technologies Ltd. v. JCIT
320 ITR 577 · 2010 · Supreme Court
353
citing judgments

The case concerns the allowability of deductions for provisions made under Section 36 of the Income Tax Act, 1961, especially those related to bad and doubtful debts. It distinguishes such deductions from the recognition of interest income on non-performing assets (NPAs).

Calcutta Co. Ltd. v. CIT
37 ITR 1 · 1959 · Supreme Court
341
citing judgments

When following the mercantile system of accounting, provisions for liabilities made on a scientific and rational basis are allowable as deductions, even if their actual quantification and discharge are deferred to a future date.

Catholic Syrian Bank Ltd. v. CIT
343 ITR 270 · 2012 · Supreme Court
326
citing judgments

For a bad debt deduction under Section 36(1)(vii), the debt must be actually written off as irrecoverable in the assessee's accounts, distinct from merely making a provision for bad and doubtful debts. The assessee bears the onus to satisfy the conditions under both Section 36(1)(vii) and Section 36(2) of the Income-tax Act.

United Commercial Bank v. CIT
240 ITR 355 · 1999 · Supreme Court
314
citing judgments

Liabilities accrued on a notional basis are allowable as deductions under the mercantile system of accounting even if their exact quantification or discharge is deferred to a future date or if the demand itself is disputed.

M.M.Aqua Technologies Limited v. CIT
436 ITR 582 · 2021 · Supreme Court
308
citing judgments

Amendments to tax law that impose new obligations or change existing legal positions apply prospectively, even if stated to be "for the removal of doubts." The judgment also clarifies that deductions under Section 43B are allowed only on actual payment, overriding the mercantile system of accounting.

Judgments citing Section 36(1)(viia)

The South Indian Bank Limited, Thrissur vs. PCIT, Thrissur

In the result, the appeal by the assessee is allowed

ITA 628/COCH/2024[2018-19]Status: DisposedITAT Cochin27 May 2025AY 2018-19

Bench: Shri Inturi Rama Raoshri Sandeep Singh Karhailthe South Indian Bank Limited, Head Office, Mission Quarters, Tb Road, Thrissur Kerala - 680001 ............... Appellant Pan : Aabct0022F V/S Pcit, Aayakar Bhavan, North Block, ……………… Respondent New Annex Building Mananchira, Kozhikode Kerala.

For Appellant: Shri Naresh C, CAFor Respondent: Shri Sanjit Kumar Das, CIT-DR
Section 142(1)Section 143Section 143(2)Section 143(3)Section 154Section 250Section 263Section 36(1)(vii)Section 36(1)(viia)Section 36(2)(v)

Accordingly, the learned PCIT alleged that there is an error apparent from the record by way of acceptance of the provision account under section 36(1)(viia) of the Act without considering the recomputed figures made by the Jurisdictional Assessing Officer. Vide order dated 16/05/2024 passed under section ... passed by the Jurisdictional Assessing Officer for the assessment year 2017-18 recomputing the closing balance of the provision of bad debts under section 36(1)(viia) of the Actwas passed on 30/03/2023, we are of the considered view that the same cannot be said to 9 be available

Raiganj Central Co-Operative Bank Ltd., Uttar Dinajpur vs. D.C.I.T., Circle - 2(1), Jalpaiguri

In the result, the appeal for A

ITA 1923/KOL/2024[2014-2015]Status: DisposedITAT Kolkata23 May 2025AY 2014-2015

Bench: Shri Pradip Kumar Choubey & Shri Rakesh Mishra

Section 115Section 143(3)Section 156Section 250Section 40

business of banking and holding license from Reserve Bank of India. The appellant is a non-scheduled bank and provisions of section 36(1)(viia) is applicable to the appellant. During the year, the appellant debited in its Profit and Loss Account the aforesaid sum of Rs.14,61,740/- complying

Raiganj Central Co-Operative Bank Ltd., Uttar Dinajpur vs. A.C.I.T., Circle - 2(2), Jalpaiguri

In the result, the appeal for A

ITA 1887/KOL/2024[2017-2018]Status: DisposedITAT Kolkata23 May 2025AY 2017-2018

Bench: Shri Pradip Kumar Choubey & Shri Rakesh Mishra

Section 115Section 143(3)Section 156Section 250Section 40

business of banking and holding license from Reserve Bank of India. The appellant is a non-scheduled bank and provisions of section 36(1)(viia) is applicable to the appellant. During the year, the appellant debited in its Profit and Loss Account the aforesaid sum of Rs.14,61,740/- complying

Raiganj Central Co-Operative Bank Ltd., Uttar Dinajpur vs. D.C.I.T., Circle - 2(2), Jalpaiguri

In the result, the appeal for A

ITA 1886/KOL/2024[2015-2016]Status: DisposedITAT Kolkata23 May 2025AY 2015-2016

Bench: Shri Pradip Kumar Choubey & Shri Rakesh Mishra

Section 115Section 143(3)Section 156Section 250Section 40

business of banking and holding license from Reserve Bank of India. The appellant is a non-scheduled bank and provisions of section 36(1)(viia) is applicable to the appellant. During the year, the appellant debited in its Profit and Loss Account the aforesaid sum of Rs.14,61,740/- complying

Small Industries Development Bank of India, Mumbai vs. Principal Commissioner of Income Tax Officer, Mumbai 3, Mumbai

Appeal is allowed

ITA 2798/MUM/2024[2018-19]Status: DisposedITAT Mumbai22 May 2025AY 2018-19

Bench: Smt. Beena Pillai(Jm) & Shri Omkareshwar Chidara(Am) Small Industries Development Principal Bank Of India Commissioner Of I.T. Swavalamban Bhavan, C-11 Vs. Room No. 612, 6Th G Block, Bandra Kurala Floor, Aayakar Complex, Bandra East Bhavan, M.K. Road Mumbai-400 051. Mumbai-400 020. Pan : Aabcs3480N Appellant Respondent

For Respondent: Shri Piyush Chhajed &
Section 263Section 36(1)Section 36(1)(vii)Section 36(1)(viia)Section 36(1)(viii)

computed the deduction under section 36(1)(viii) of the Act, where it was held as follows :- “In view of the provisions of section 36(1)(viia)(c) produced above, it can be seen that the amount of deduction is computed by viewing the total income computed before making ... deduction correctly allowable u/s 36(1)(viia)(c) it would be essential to first compute deduction u/s 36(1) (viii). Thus, provision of section 36(1)(viia)(c) comes into operation at a stage subsequent to the computation of business income i.e. after allowing the deduction u/s.36(1)(viii). Further

Saurashtra Gramin Bank, Rajkot vs. Assistat Commissioner of Income Tax NFAC, National Faceless Assessment Centre Delhi

In the result, the appeal of the assessee is allowed

ITA 183/RJT/2024[2014-15]Status: DisposedITAT Rajkot19 May 2025AY 2014-15

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinha

For Appellant: Ms. A.D. Vyas, ARFor Respondent: Shri Sanjay Punglia, CIT-DR
Section 143(3)Section 147Section 148Section 250Section 36(1)(viia)

that as the Saurashtra Gramin Bank is a scheduled bank incorporated under the laws of Regional Rural Bank, so the benefit under the section 36(1)(viia) was available to it. It did not give requirement/need assessment for the provision. Further, as per the P/L account, no fresh provision

The Kerala State Financial Enterprise Ltd, Chembukkavu vs. DCIT, Circle-1(1) &Tps, Thrissur

In the result, appeal filed by the assessee as well as Revenue stand partly allowed

ITA 81/COCH/2024[2020-2021]Status: DisposedITAT Cochin14 May 2025AY 2020-2021

Bench: Shri Inturi Rama Rao, Accontant Member & Shri Sandeep Singh Karhail

For Respondent: Sri.Sanjit Kumar Das, CIT-DR
Section 143(3)Section 40Section 40A(3)

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Inturi Rama Rao, Accontant Member & Shri Sandeep Singh Karhail

Assistant Commissioner of Income Tax, Circle-1(1), Thrissur vs. The Kerala State Financial Enterprises Limited, Thrissur

In the result, appeal filed by the assessee as well as Revenue stand partly allowed

ITA 51/COCH/2024[2021]Status: DisposedITAT Cochin14 May 2025

Bench: Shri Inturi Rama Rao, Accontant Member & Shri Sandeep Singh Karhail

For Respondent: Sri.Sanjit Kumar Das, CIT-DR
Section 143(3)Section 40Section 40A(3)

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Inturi Rama Rao, Accontant Member & Shri Sandeep Singh Karhail

Assistant Commissioner of Income Tax, Thrissur vs. The Kerala State Financial Enterprises Limited, Thrissur

In the result, appeal filed by the assessee as well as Revenue stand partly allowed

ITA 50/COCH/2024[2020-21]Status: DisposedITAT Cochin14 May 2025AY 2020-21

Bench: Shri Inturi Rama Rao, Accontant Member & Shri Sandeep Singh Karhail

For Respondent: Sri.Sanjit Kumar Das, CIT-DR
Section 143(3)Section 40Section 40A(3)

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Inturi Rama Rao, Accontant Member & Shri Sandeep Singh Karhail

The Kerala State Financial Enterprises Limited, Thrissur vs. DCIT, Circle 1(1) Tps, Thrissur

In the result, appeal filed by the assessee as well as Revenue stand partly allowed

ITA 869/COCH/2023[2021-22]Status: DisposedITAT Cochin14 May 2025AY 2021-22

Bench: Shri Inturi Rama Rao, Accontant Member & Shri Sandeep Singh Karhail

For Respondent: Sri.Sanjit Kumar Das, CIT-DR
Section 143(3)Section 40Section 40A(3)

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Inturi Rama Rao, Accontant Member & Shri Sandeep Singh Karhail

The Kollam District Co Operative Bank Ltd, Kollam vs. Assistant Commissioner of Income Tax, Circle Kollam

In the result, appeal filed by the assessee sands dismissed

ITA 660/COCH/2023[2017-18]Status: DisposedITAT Cochin14 May 2025AY 2017-18

Bench: Shri Inturi Rama Rao, Am & Shri Prakash Chand Yadav, Jm Assessment Year: 2017-18 Kollam District Co-Operative Bank Ltd. .......... Appellant Chinnakada, Kollam 691001 [Pan: Aaaat4088L] Vs. The Income Tax Officer, Circle Kollam .......... Respondent Appellant By: ------- None ------- Respondent By: Shri Sanjit Kumar Das, Cit-Dr Date Of Hearing: 24.02.2025 Date Of Pronouncement: 14.05.2025 O R D E R Per: Inturi Rama Rao, Am This Appeal Filed By The Assessee Is Directed Against The Order Of The National Faceless Appeal Centre, Delhi [Cit(A)], Dated 19.05.2023 For Assessment Year (Ay) 2017-18. 2. Brief Facts Of The Case Are That The Appellant Is A District Co- Operative Bank Engaged In The Business Of Accepting Deposits From Members & Lending Money To Its Members. The Return Of Income For Ay 2017-18 Was Filed On 01.11.2017 Declaring Total Income At Rs. 16,14,89,500/-. Against The Said Return Of Income, The 2 Kollam District Co-Operative Bank Ltd. Assessment Was Completed By The Acit, Circle Kollam (Hereinafter Called "The Ao") Vide Order Dated 23.12.2019 Passed U/S. 143(3) Of The Act At A Total Income Of Rs. 26,20,34,663/-. While Doing So, The Ao Made The Following Disallowances/Additions: -

For Appellant: ------- None -------For Respondent: Shri Sanjit Kumar Das, CIT-DR
Section 143(3)Section 36(1)(vii)Section 36(1)(viia)Section 40Section 48

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM AND SHRI PRAKASH CHAND YADAV, JM

Kudos Finance and Investment Pvt Ltd, Mumbai vs. Principle Commissioner of Income Tax-6, Mumbai

ITA 3075/MUM/2024[2019-20]Status: DisposedITAT Mumbai14 May 2025AY 2019-20

Bench: SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Shri Abhilash HiranFor Respondent: Shri Biswanath Das
Section 143(1)Section 143(1)(a)Section 253(1)(c)Section 263Section 36(1)

income the Assessee had claimed deduction of INR.1,07,35,497/- in respect of provision of „Provision for bad and doubtful debts‟ under Section 36(1)(viia) of the Act. As per Section 36(1)(viia) of the Act a Non-Banking Finance Company, such as the Assessee, is allowed ... total income. Since, in the present case Assessee had returned loss, the Assessee was not eligible to claim deduction under Section 36(1)(viia) of the Act. However, while processing the return of income the deduction claimed by the Assessee under Section 36(1)(viia

Kudos Finance and Investments Pvt. Ltd., Pune vs. ITO, Ward-14 (2)(1), Mumbai

ITA 3015/MUM/2024[2019-20]Status: DisposedITAT Mumbai14 May 2025AY 2019-20
For Appellant: Shri Abhilash HiranFor Respondent: Shri Biswanath Das
Section 143(1)Section 143(1)(a)Section 253(1)(c)Section 263Section 36(1)(viia)

section 143(1) of the Act by giving directions to the teamed AD for making an enquiry with respect to claim made under section 36(1)(viia) of the Act violating the scope of Section 143(1) of the Act where only apparent inconsistencies as evident on the face ... income the Assessee had claimed deduction of INR.1,07,35,497/- in respect of provision of 'Provision for bad and doubtful debts' under Section 36(1)(viia) of the Act. As per Section 36(1)(viia) of the Act a Non-Banking Finance Company, such as the Assessee, is allowed

Canara Bank ( E Syndicate Bank), Bengaluru vs. Deputy Commissioner of Income Tax, Circle-2(1)(1), Bangalore, Bengaluru

In the result, the appeal by the assessee is allowed

ITA 112/BANG/2024[2020-21]Status: DisposedITAT Bangalore13 May 2025AY 2020-21

Bench: Shri Prashant Maharishi & Shri Soundararajan K.Assessment Year: 2020-21

For Appellant: Shri S. Ananthan, CAFor Respondent: Smt. Srinandini Das, CIT(DR)(ITAT), Bengaluru
Section 143(3)Section 14ASection 28Section 36(1)(vii)Section 36(1)(viia)Section 37

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH: BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT AND SHRI SOUNDARARAJAN K., JUDICIAL

Hipe Infrastructure Projects LLP, Bangalore vs. Assistant Commissioner of Income Tax, Circle-7(1)(1), Bangalore

In the result, appeal filed by the assessee is allowed

ITA 1338/BANG/2024[2018-19]Status: DisposedITAT Bangalore06 May 2025AY 2018-19

Bench: Shri. Laxmi Prasad Sahu & Shri. Soundararajan Kassessment Year :2018-19

For Appellant: Shri. Narendra Kumar Jain, AdvocateFor Respondent: Shri. Sunil Kumar Agarwal, CIT(DR)(ITAT), Bangalore
Section 143(2)Section 68Section 69

assessee has made provision for bad and doubtful debts of Rs.1,15,00,000/- and subsequently it has disallowed the same under section 36(1)(viia) of the Act while contributing the taxable income during the year. It was also noted that this provision of the Act is not applicable ... made on the prudential norms as decided by the management and while filing the return of income inadvertently, it was disallowed under section 36(1)(viia) of the Act. He also agreed that the provision of section 36(1)(viia) of Page 7 of 9 the Act is not applicable

Madhya Pradesh Madhya Kshetra Vidut Vitaran Company Limited, Bhopal vs. The DCIT- 2-(1), Bhopal

Appeal is allowed for statistical purpose

ITA 551/IND/2023[2012-13]Status: DisposedITAT Indore30 Apr 2025AY 2012-13

Bench: Shri B.M. Biyani & Shri Paresh M. Joshi

Section 143(3)Section 263Section 271(1)(c)Section 36(1)(viia)

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI B.M. BIYANI, ACCOUNTANT MEMBER AND SHRI PARESH M. JOSHI

Madhya Pradesh Madhya Kshetra Vidut Vitaran Co Ltd, Bhopal vs. The ITO 2(1), Bhopal

In the result, this appeal is allowed for statistical purpose

ITA 252/IND/2023[2014-15]Status: DisposedITAT Indore30 Apr 2025AY 2014-15

Bench: Shri B.M. Biyani & Shri Paresh M. Joshi

Section 143(3)Section 36Section 36(1)Section 37

from provision of doubtful debts into account and has disallowed and added back only the provision for doubtful debts. 6.3 As per section 36(1) (viia) of the I.T. Act the provision for bad and doubtful debts are allowed as deduction only for Schedules Banks, Public Financial Institutions and NBFCs ... debited to the Profit and Loss account during the relevant Financial Year. Therefore, in view of the above facts and the provisions of section 36(1)(viia) of the I.T. Act, the amount of Rs.47.31 crores disallowed by the AO is confirmed. This ground of appeal is hereby dismissed

Rajdhani Nagar Sahkari Bank Ltd, Lucknow vs. Dy.CIT Range-6, Lucknow

In the result, both the appeals in ITA Nos

ITA 142/LKW/2024[2012-13]Status: DisposedITAT Lucknow30 Apr 2025AY 2012-13

Bench: Sh. Kul Bharat & Sh. Nikhil Choudhary

For Appellant: Sh. K.R. Rastogi, C.A. & Sh. ShubhamFor Respondent: Sh. Sanjeev Krishna Sharma, Addl CIT (DR)
Section 2(24)(x)Section 36(1)Section 36(1)(v)

Before the Id. CIT(A), it was submitted that due to a mistake, the assessee had not claimed statutory deduction under section 36(1)(viia) and 36(1)(viii) of the I.T. Act. However, it had made provisions for NPA of Rs.81,73,424/- and debited the same ... Rajdhani Nagar Sahkari Bank Ltd. the profit and loss account. The same was required for claiming the statutory deduction under section 36(1)(viia) and 36(1)(viii) of the Income Tax Act. It was submitted that the mistake for not claiming the specific deduction in the return was unintentional

Bank of Baroda (Erstwhile Dena Bank ), Mumbai vs. The Assistant Commissioner of Incometax Circle -2(1)(1), Mumbai

ITA 1654/MUM/2025[2019-20]Status: DisposedITAT Mumbai29 Apr 2025AY 2019-20

Bench: Shri Saktijit Dey, V.P. & Ms. Padmavathy S., Am

For Respondent: Shri Rakesh Ranjan, CIT (DR)
Section 36(1)(vii)Section 36(1)(viia)

noticed that the assessee had claimed deduction of Rs.4620,87,19,739/- on account of bad debts written off in terms of Section 36(1)(viia) of the Act. On verification of details of the claim, the AO observed that against the provision made for doubtful debts u/s. 36(1

Dy. Commissioner of Income Tax, Circle-1(1), Hyderabad vs. Union Bank of India, Hyderabad

In the result, the appeal of revenue is partly allowed for statistical

ITA 316/HYD/2019[2015-16]Status: DisposedITAT Hyderabad21 Apr 2025AY 2015-16
For Appellant: Shri S. Ananthan, C.A. &For Respondent: Ms. M Narmada, CIT-DR
Section 143(3)Section 14ASection 36(1)Section 36(1)(vii)Section 36(1)(viia)Section 36(1)(viii)Section 36(1)(vila)

their books of account and finally claimed deduction of Rs.1485,43,30,689/- in their computation of income as per the provisions of section 36(1)(viia) of the Act. However, only due to the difference in nomenclature of the account i.e. “provision for NPA” instead of “provision for doubtful ... aside the issue to the file of Ld. AO for recalculation. 11. In rejoinder, the Ld. AR invited our attention to provision of section 36(1)(viia) of the Act and submitted that, there is no requirement under the Act to consider the amount of security before making any provision